Market Report

Issue 63

Mar's Market Report:

eBook Retailer Comparison


J.A. Marlow

Copyright © 2011, J.A. Marlow, All Rights Reserved


According to Association of American Publishers (AAP) sales figures, eBooks ranked as "the #1 format among all categories of Trade publishing” in February 2011. While sales of other formats are falling, or staying static, eBooks are exploding. Compared to February 2010, sales have increased 202.3% for February 2011.



With the explosion in eBooks, the world of publishing is changing, which allows the smaller player access to some of the same distribution channels as the big publishing companies. That is, if one knows where to look.




There are three main distribution outlets for independent authors and publishers. Each is non-exclusive, which means you can use all three without violating any contracts. All three services have no up-front costs. Instead, they take a percentage of the sale price when an item sells.




As with anything, be sure to read all contracts and Terms of Service before uploading. Also, review the material on a regular basis, as details and terms can change at any time.










Smashwords is both an online eBook retailer and a distribution company. As of April 6, 2011, their Premium Distribution channel consists of Apple iBookstores (Australia, Germany, U.S., UK, France, and Canada), Barnes & Noble, Sony, the Diesel eBook Store, Kobo, Borders Australia (via Kobo), Whitcoulls in New Zealand (via Kobo), Stanza, Aldiko, FBReader, and Word-Player.




Note that to use Smashwords as a distribution company you must format the eBook correctly and submit it for approval.




File Upload Formats: .doc (which Smashwords' automated conversion program called the Meatgrinder then converts into multiple eBook formats). eBooks are sold in multiple formats, which can be chosen by the author and publisher at time of upload.




Cover Image Format: .JPG, .PNG. The cover images should be vertical and rectangle-shaped rather than squares. They must be a minimum height of 600 pixels. 500 pixels wide X 700 pixels tall is a good size and ratio (your height is approximately 1.4 times greater than your width).




List Price Restrictions: Smashwords does not restrict the price authors and publishers wish to set, including the option of giving the works away for free.




DRM (Digital Rights Management): Smashwords does not offer DRM on eBook files.




ISBN: An ISBN number is not required to list in the Smashwords site. However, it is required for Premium Distribution. You can use your own ISBN, use a free one from Smashwords, or buy one from Smashwords for $9.95.




Online Catalog Time: eBooks appear for sale the moment the Meatgrinder conversion process is finished. NOTE: Approvals into the Premium Distribution take longer, as files are manually inspected. Wait times of one to four weeks are normal.




Royalty Rates (approximate):




eBooks sold through Smashwords Direct: 85% The royalty rate for sales originated by affiliate marketers is 70.5% net.




Premium Distribution: Royalty rates vary according to retailer.




Apple, Barnes & Noble, and Diesel are 60% of retail price.




Kobo is also 60% for books priced between $.99 and $12.99 for U.S. and Canadian dollar-denominated sales. Sales in other currencies at Kobo are at 38% list.




Royalty rates can vary according to country where the eBook is sold.




Payments are issued to the author or publisher quarterly if over U.S.D. $75.00 for U.S. authors who want paper checks, and $10.00 for all authors who want electronic payment via PayPal. All authors and publishers outside the U.S. are paid via PayPal.




Smashwords is open to working with authors or publishers outside the United States, and will help them acquire an IRS-issued tax identification number so no taxes, or limited taxes, are withheld.




Pros: Smashwords is a great, inexpensive way to get into distribution channels that may be difficult or impossible for an author or publisher to get into by themselves.




Support requests are quickly returned, and Mark Coker, the owner, is open to new ideas, site/process improvements, and sales channels.




Good help files and formatting advice are available from the Smashwords website. The Smashwords Style Guide is an excellent resource for formatting.




Smashwords provides the most flexibility over sample size of any of the three big sites. This is especially valuable with shorter works where a standard 10-15% sample would not be big enough.




Smashwords has an author landing page. EXAMPLE: J.A. Marlow (link:




Cons: Learning to properly format the .doc file for uploading into their Meatgrinder conversion program can take time.




Titles and changes take a while to propagate out into the Premium Distribution feed.




Receiving sales information from the Premium Distribution channels is slow, sometimes taking up to six months.




The sales reporting format could use work







Amazon Kindle Direct Publishing




File Upload Formats: HTML, .mobi, Microsoft Word (.doc), ePub (.epub), Plain Text (.txt), Adobe PDF (.pdf), and Zipped HTML (.zip). All eBooks are converted, if necessary, and are sold in the .mobi format.




Cover Image Format: .JPG, .GIF, .PNG, .BMP. Image must be a minimum of 500 pixels, horizontally, and a maximum of 1280 pixels, vertically.




List Price Restrictions: Amazon will not allow authors or publishers to offer free eBooks. The maximum eBook price allowed is $200.




DRM (Digital Rights Management): Amazon allows the authors or publishers to choose between DRM or No DRM. This choice cannot be changed once an eBook is published.




ISBN: An ISBN number is not required. Amazon uses their own identification number for their online catalog.




Online Catalog Time: eBooks appear for sale within 24-to-72 hours for the U.S. site. Inclusion into overseas catalogs can take three-to-four days (and sometimes more).








Amazon offers two royalty options: 35% Royalty Option or the 70% Royalty Option.




35% Option:




35% royalty on the list price, even if Amazon chooses to discount the sales price. The only time an author or publisher will not be paid 35% is if Amazon decides to use the eBook as a Free Promotion.




70% Option:




The 70% option is available only in the following territories: Canada, United Kingdom (including Guernsey, Jersey, and Isle of Man), and United States. All other territories will be at the 35% royalty rate. Any eBook below $2.99 or above $9.99 will default to a 35% royalty rate. A "Delivery Fee" of .15 per one megabyte (1024 kilobytes) will apply. If Amazon price-matches a competitor, the royalty will be based off the new, lower price-matched price.




To qualify for the 70% rate:




The eBook must be priced between $2.99 and $9.99.




The author or publisher must make the eBook available in all Amazon territories where the distribution rights are not already subject to a prior contract.




The eBook must be 20% below the list price for any physical edition in any sales channel.




The eBook cannot consist primarily of public domain content.




Payments are paid into your bank account or by check 60 days after the close of the calendar month in which the sale occurs. Minimum royalties earned before payment is made: $10 by EFT Direct Deposit, or $100 by check.




Pros: Amazon has good help documentation as well as a forum to get help from others.




Amazon is the largest eBook retailer in the world, so sales are usually higher than the other retailers.




There are multiple opportunities for the author or publisher to add content to the product page, as well as tools to aid in marketing. This includes a flexible author landing page, which can bring in feeds from blogs, twitter, and other sources. EXAMPLE: J.A. Marlow (link:




Cons: Their price-matching Webcrawler actively looks for sales of your book that might be priced lower at a rival retailer. If they find a lower price for your eBook, Amazon will drop your List Price to match. Depending on the royalty rate you choose, this can dramatically impact income.




It can take a while for a book, or any changes, to appear in the catalog.




Tags and author pages do not multiply out to the international Amazon stores, affecting sales in other countries.







Barnes & Noble PubIt!




Barnes & Noble is the most recent of the Big Three to allow uploads directly by indie authors and publishers. The company reports dramatic increases in eBook sales, especially among the romance and young adult genres. They are also actively promoting their Nook eBook reader within stores and thereby increasing their market share.




File Uploading Formats: .ePub, HTML, RTF, TXT, DOC, or DOCX. All eBooks are converted, if necessary, and are sold in the ePub format.




Cover Image Format: .JPG. The sides must be between 750 pixels and 2000 pixels in length.




DRM (Digital Rights Management): Barnes & Noble allows the author or publisher to choose between DRM or No DRM. This choice cannot be changed once an eBook is published.




ISBN: An ISBN number is not required.




Online Catalog Time: eBooks appear for sale in 24-to-72 hours.




List Price Restrictions: List Prices must be between $0.99 and $199.99. However, an author or publisher can use the Smashwords' Premium Distribution to get free eBooks into the Barnes & Noble store.




Royalty Rates 65% of the List Price for eBooks with a List Price at or between $2.99 and $9.99




40% of the List Price for eBooks with a List Price at or below $2.98 or at or above $10.00 (but not more than $199.99 and not less than $0.99).




Payments are paid into your bank account 60 days after the close of the calendar month in which the sale occurs if the royalties to be paid equal $10 U.S.D. or more.




Pros: PubIt allows up to five choices in categories, compared to two for the other retailers. This is better for listings when eBooks cross genres.




An easy one-page New Title screen makes uploading eBooks simple.




PubIt has good help documentation, including for correct formatting.




Cons: Authors or publishers not in the United States cannot use the service. However, distribution into the online store is possible by using Smashwords as a distributor.




PubIt has one of the smallest sample sizes of the Big Three, showing only up to 5% of the eBooks. There is no option for increasing the size of the sample. This means the sample for a short story may consist of only two or three pages.




Barnes & Noble is going through growing pains with their online catalog. The system crashed during the 2010 holiday season, and there have been delays in reporting sales, as well as search and ranking issues.




Getting a response from customer service can be difficult and frustrating.




Barnes & Noble offers no author landing page.








The above eBook retailers currently make up approximately 80% of the market. Other retailers are scrambling to offer eBooks, with varying levels of success. As such, the market share is sure to change in the future as the market continues to grow.




It pays to keep an eye on developing eBook markets. Always read the contract and Terms of Service and be sure they are in your best interest. For small authors or publishers, these boilerplate agreements are not open for negotiation, and agreeing to the wrong one can cause many headaches and loss of income in the future.




The future is bright for independent authors and publishers in the eBook world, as long as one knows where to look for the opportunities.




Check out J.A. Marlow's website for more information about Indie Publishing: